No Quit in Xbox Rivals

Microsoft competitors Nintendo and Sony have the Revolution and PlayStation 3 on deck.

Et Tu, Nintendo?

And what of Nintendo? With the Revolution, the company is taking a different route than its two main rivals, focusing on creating a pure game machine that will include an innovative, wand-like controller, and letting Sony and Microsoft duke it out over which machine has more added features and is most powerful.

Nintendo wants to emphasize fun rather than high-definition graphics, and in so doing, lure innovative gamemakers by promising them relatively inexpensive development costs.

The company also hopes that creative, accessible games will attract women -- a demographic largely left out of the video game business -- and other first-time buyers.

Microsoft's and Sony's plan will "only get you so far," argues George Harrison, senior vice president of marketing for Nintendo.

Although Nintendo has been bested by Sony in the past two console cycles, it does have a record of success. Not only was Nintendo the leading console maker until the mid-1990s, but it also remains the leading handheld maker.

Additionally, on the handheld side, with games such as Nintendogs, the company seems to be profiting on its strategy of using accessible games to attract new consumers.

Still, many analysts believe that the Revolution will appeal only to Nintendo's core audience of preteen and adolescent gamers, and see Nintendo running a distant third to Sony and Microsoft.

"I'm expecting them be more or less where they are today. I don't see anything that Nintendo's doing that differentiates them," says Goodman. "It's great that they've got this funky controller, but I don't see that as anything that's going to move the market."